14e54the Cadbury & Green Code of Best Practice (1)

8/7/2019 14e54the Cadbury & Green Code of Best Practice (1)

1/8

THE CADBURY CODE OF BEST PRACTICE

THE CODE OF BEST PRACTICES

1. The Board of Directors

1.1 The board should meet regularly retain full and effective

control over the company and monitor the executive

management.

1.2 There should be a clearly accepted division of

responsibilities at the head of a company, which will

ensure a balance of power and authority such that no

one individual has unfettered powers of decision.

Where the chairman is also the chief executive, it is

essential that there should be a strong and independent

element on the board, with a recognized senior

member.

1.3 The board should include non-executive directors of

sufficient caliber and number for their views to carrysignificant weight in boards decision.


2/8

1.4 The board should have a formal schedule of matters

specifically reserved to it for decision to ensure that the

direction and control of the company is firmly in its hand

(Note 2).

1.5 There should be an agreed procedure for directors in

the furtherance of their duties to take independent

professional advice if necessary at the companys

expense (Note 3).

1.6 All directors should have access to the advice and

services of the company secretary. CS is responsible to

the board for ensuring that board procedures are

followed and that applicable rules and regulations are

complied with any question of the removal of company

secretary should be a matter for board as a whole.


3/8

2. Non-Executive Directors

2.1 Non-executive directors should bring an independent

judgement to bear on issues of strategy, performance,

resources, including key appointments and standards of

conduct.

2.2 The majority should be independent of management

and free from any business or other relationship which

could materially interfere with the exercise of theirindependent judgement, apart from their fees and

shareholding. Their fees should reflect the time which

they commit to the company.

2.3 Non-executive directors should be appointed for

specified terms and reappointment should not be

automatic.

2.4 Non-executive directors should be selected through a

formal process and both this process and their

appointment should be a matter for the board as awhole.


4/8

3. Executive Directors

3.1 Directors service contracts should not exceed three

years without shareholders approval.

3.2 There should be full and clear disclosure of directors

total emoluments and those of the chairman and

highest paid UK Director, including pension

contributions and stock options. Separate figures

should be given for salary and performance relatedelements and the basis on which performance is

measured should be explained.

3.3 Executive directors pay should be subject to the

recommendations of a Remuneration Committee made

up wholly or mainly of non-executive directors.


5/8

4. Reporting and Controls

4.1 It is the boards duty to present a balanced and

understandable assessment of the companys position.

4.2 The board should ensure that an objective and

professional relationship is maintained with the

auditors.

4.3 The board should establish an audit committee of atleast 3 non-executive directors with written terms of

reference which deal clearly with its authority and

duties.

4.4 The directors should report that the business is a going

concern, with supporting assumptions or qualifications

as necessary.


6/8

Appendix B

GREENBURY RECOMMENDATIONS

CODE OF BEST PRACTICES

1. Introduction

1.1 The purpose of the accompanying code is to set out

best practice in determining and accounting for

Directors remuneration.

1.2 The detailed provisions have been prepared with largecompanies mainly in mind, but the principles apply

equally to smaller companies.

1.3 We recommend that all listed companies in the UK

should comply with the Code to the fullest extent

practicable and include a statement about their

compliance in the annual reports to shareholders by

their remuneration committees or elsewhere in their

annual reports and accounts. Any areas of non-

compliance should be explained and justified.

1.4 We further recommend that the London Stock

Exchange should introduce the following continuing

obligations for listed companies.


7/8

An obligation to include in their annual Remuneration

Committee reports to shareholders or their annual reports

a general statement about their compliance with Section A

of the Code which should also explain and justify any area

of non-compliance.

A specific obligation to comply with the provisions in

Section B of the Code which are not already covered by

existing obligations and with provision C 10 of the Code,

subject to any changes of working which may be desirable

for legal or technical reasons.

1.5 Within Section-B provision B-3 requires remuneration

committees to confirm that full consideration has been

given to Section C and D of the Code.


8/8

Documents

14e54the Cadbury & Green Code of Best Practice (1)